Supreme Court Holds That Proof of Loss Causation Not Required at Class Certification

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The Supreme Court held Monday that plaintiffs in securities fraud class actions are not required to prove loss causation at the class certification stage of the litigation. The unanimous opinion, authored by Chief Justice Roberts, reverses the 2010 decision of the Fifth Circuit Court of Appeals in Erica P. John Fund, Inc. v. Halliburton Co., 597 F.3d 330 (5th Cir. 2010).

Background

Petitioner Erica P. John Fund (the Fund), a purported Halliburton stockholder, alleged that Halliburton made a series of false and misleading statements during a class period from June 1999 to December 2001. The alleged misstatements concerned three separate issues: (i) Halliburton’s asbestos liabilities; (ii) the benefits of Halliburton’s merger with Dresser Industries; and (iii) Halliburton’s accounting decisions regarding certain fixed-price contracts.

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Published In: Business Torts Updates, Civil Procedure Updates, Mergers & Acquisitions Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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